Real estate investing is not nearly as complicated, financially burdensome, or time consuming as you might think. In fact, Its easy to add raw land, shopping centers, apartment complexes, and private homes to your portfolio without brokers, bankers, attorneys, and handymen on your payroll. Even better, the zero overhead approach allows you to blend your real estate investments into your securities portfolio for ease of management, income monitoring, diversification, and analysis.

I know you think that the entire real estate market is in a shambles, and that it is far too dangerous to get involved now, what with all the nasty uncertainty that has decimated property values. But where did the real damage take place, and why? Without having mega millions to work with, or a line of credit that goes around the block, you can have positions in various forms of Real

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Forgive us a short rant this evening. This country is sick. When the three main engines of growth - consumer spending, real estate, and financial services - are broken, it’s just not possible to make any economic progress. And for just a moment, let’s think about how pathetic those key sectors really are.

Cogent analysis of our per capita consumption requires some historical knowledge, since no contemporary people compares with our particular level of decadence. At least the Romans had some style: we borrow profligately to buy more junk than we can keep track of, and then elect corrupt politicians to ensure those products will be as unsafe as possible. We satisfy ourselves with plastic toys and plastic food and live at a standard so high that, when the rest of the world follows suit, the

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It is ironic that US REITs year-to-date have outperformed US stocks, non-US developed market stocks, and emerging market stocks, as well as directly owned commercial and residential real estate. Only commodities have outperformed REITs so far this year.

VNQ, ICF, IYR and RWR are still down from 17% to 20% on a trailing 12-month basis, but they provide a 12-month distribution yield of from 3.90% to 4.75% which is more than the current 10-year T-Bond rate of about 3.70%.

How vulnerable REITs are to a reversal of fortune is unclear.  If the economy is as vulnerable to major recession as some say, the rental income of REITs may not prove as strong as expected, which would tend to lower the distribution yield.  Continued outperformance itself, would reduce the yield rate.  …

This is the quandy I’ve been pointing out multiple times… with a “normal” mortgage, with a “normal” down payment, many people are still priced out of most major urban areas, even with this first wave of price reductions. [What Should Median Home Prices be Today?] This is why homes still need to go down substantially in many (not all) areas…. the lowering of wages through a move to “service economy” only exaggerates the issue. Now here is the interesting story developing. As home prices closer to major cities got out of reach, the working class (teachers, policemen, et al) moved farther and farther away… this way they can still have their 2500 sq foot house, offset by a 45 minute, 1 hour, 1 hour + (especially in CA) commute. Now those same people need to

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Here is a simple and honest proposition: Data interpretation should lead to conclusions, not the reverse.

If an analyst believes that an indicator is important, and trumpets news about that indicator, it is intellectually dishonest to abandon the measure when it moves the other way.

If one endorses the Baltic Dry Freight index, Dr. Copper, or the inverted yield curve, then one should be willing to change forecasts when those indicators reverse.

Fair enough?

Some of these have recently rebounded, with little attention. We shall follow up in more detail.

The Application to Housing

Nearly everyone, even those who are not equity investors, is interested in the housing market. Calculated Risk (a site we feature, along with everyone else!) covers this like a blanket. There are several key articles today. Our advice is to read them all.

A story describing the absolute worst case of subprime lending and packaging. …